New property purchase guidelines in Selangor. Issues?

Recently, Selangor announced a new set of guidelines of property purchases in Selangor by foreigners, PR and foreign companies. Suddenly, there were many reports. Some said this is very bad for the market because these restrictions would cause the foreigners to shun Selangor. Some said, this will help to prevent foreigners from buying up everything that’s available in Selangor. Some said, this will cause the current slowdown to slow down even further. Oh yeah, the new guidelines would also govern the participants of Malaysia My Second Home programme and these participants are to buy directly from the developers and not from the secondary market and they are allowed to only buy one residential unit per family.
My view? Let’s support this ruling at least for the next 1 year before we decide on what’s the best step moving forward. My reasoning is simple. The current market is already slowing down. Luxury properties are also slowing down, whether this ruling comes in or not. Foreign purchase are not likely to be the main cause of this slowdown anyway. Also, today when we look at RM1 million properties, at areas which the foreigners like to buy, we can safely conclude that there’s none, not even condos and certainly not any gated and guarded projects by any reputable developers. RM2 million is a much more ‘real’ number compared to RM1 million no matter which online property site you refer to.
If this ruling came during good times, I think the grouses would be even louder. 🙂   This however would cause some sellers of secondary properties to feel unhappy because the prices for such properties may be affected by these new guidelines. If I am a genuine foreigner looking at staying in Malaysia for the long term, the prices are still reasonable, even when compared to some other ASEAN countries. If I am a business owner, the prices stated here would not deter me from buying. It will make me think even more objectively whether should I come to Selangor or other states but if my target is Klang Valley, it will not change my decision. Of course, I am not a foreigner and I am not a business owner, so my view is still just my view.
written on 26 Sept 2014
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